Parents ‘face a house price premium’ to live near top schools

An analysis by Lloyds Bank suggests that people buying houses in the catchment area of strong performing secondary schools face paying a premium.

In the most extreme case properties near a Buckinghamshire school were almost half a million pounds more expensive than the county average.

In Yorkshire the average house price close to the top ten performing secondary schools in last summer’s GCSEs was £187,578, compared to an average figure for the region of £178,891.

Lloyds Bank said this meant parents in Yorkshire faced a five per cent premium to be able to live near some of the county’s best schools.

However several of Yorkshire’s top performing secondaries are selective grammar schools – where the admissions process is done through academic testing of primary school pupils. This means that living near to the school would not be the key determining factor in parents’ securing a place for their child.

This is shown by the figure for Heckmondwike Grammar School, where the average price of nearby properties was said to be £99,063–- much lower than the average house price across Yorkshire.

This suggests that the impact of good schools on house prices in Yorkshire would have been even higher if the bank’s study had not included grammar schools.

According to Lloyds parents in the postal district of the Beaconsfield High School in Buckinghamshire faced paying the highest premium in the country. Nearby houses cost £483,031 (154 per cent) above the average house price in the county.

Average property prices in the postal districts of the top 30 state schools in England – defined as those secondary schools that achieved the best GCSE results in 2013 – have now reached £268,098, the bank said. This is on average £20,955, or eight per cent, higher than their county averages of £247,143.

Five locations close to the top schools command a housing premium of more than £115,000.

Homes within the postal district of Sir William Borlase’s Grammar School in Buckinghamshire command the second highest premium in the country costing £184,058 – 59 per cent- above the county average.

However, half of England’s top 30 state schools are in locations where the average property price is below the average of those in their counties.

A table of the top ten schools where local properties are cheaper than the county average shows that in almost every case these schools are selective – suggesting that the they are not driving up property prices because living close to a grammar school will not guarantee a child a place.

Commenting on the premium facing parents overall Marc Page, Lloyds Bank mortgages director said: “House prices close to the nation’s top performing state schools appear to be commanding a significant premium over properties in surrounding areas.

“There is strong competition for properties in areas where state schools are providing top quality education, often in locations with limited supply, which is supporting prices.

“Although property values can be significantly lower in neighbouring areas, many parents don’t appear to be put off from paying a premium to ensure their child has the best possible chance to attend their chosen school.”